Global oilseed prices increase in July as new crop supplies look tight ahead of harvest

Improving crop conditions in the first half of August in the USA had triggered new declines, although it remained to be seen what impact the heatwave in the US Midwest in late August would have on the soyabean crop, the 22 August report said.

On 21 August, soyabean futures on the Chicago Board of Trade rose to their highest level since July as excessive heat warnings were issued in many of the country’s key production areas, World Grain wrote.

In its Grain Market Report on 17 August, the International Grains Council (IGC) said average international soyabean values – as measured by the IGC GOI sub-Index – retreated by 5% during July, “chiefly pulled by declines in the USA (and Argentina).

“Chicago soyabean futures dropped by up to 11% as improved midwest weather conditions pressured,” the IGC said. “This outweighed support, at times, from tightening availabilities and signs of an uptick in international demand for new crop supplies, as evidenced by a raft of sales to China and other destinations.”

Nominal Up River quotations in Argentina, which generally tracked movements in US values, fell by 7% month-on-month, the IGC added. However, prices in Brazil (Paranagua) were down by a relatively marginal 1%, at US$518 fob, as export premiums strengthened markedly due to solid local and international demand, as well as currency movements.

Regarding rapeseed, the IGC said “despite worries surrounding 2023/24 crop prospects in Canada, ICE canola futures declined by 6% (month-on-month) on profit taking, with losses in soyabeans a bearish influence, while fob prices (Vancouver) also fell.”

World vegetable oil prices were up by 12.1% in July compared with June – the first increase after seven months of consecutive declines – according to the United Nations Food and Agriculture Organization (FAO)’s Food Price Index, published on 8 August.

“This pronounced increase in July was driven by higher world quotations across sunflower, palm, soyabean, and rapeseed oils,” the FAO said.

“International sunflower oil prices rebounded by more than 15% month-on-month, primarily underpinned by renewed uncertainties surrounding the exportable supplies out of the Black Sea region after the decision taken by the Russian Federation to terminate the implementation of the Black Sea Grain Initiative. World palm oil prices also rose markedly, reflecting prospects of subdued production growth in leading producing countries.”

The FAO said international prices for soyabean and rapeseed oils also increased due to continuing concerns over the production outlooks of soyabeans in the USA and rapeseed in Canada respectively.

“Rising world crude oil quotations also lent support to vegetable oil prices,” the FAO said.

In its 15 August Oil Crops Outlook, the United States Department of Agriculture (USDA)’s Economic Research Service (ERS) was quoted as saying “world rapeseed production for marketing year 2023/24 is projected at 86.1M tonnes, 1.35M tonnes lower than the previous forecast due to lower-than-expected output in Canada, Russia and Uruguay. This reduction is partially offset by higher rapeseed production in Belarus and Ukraine.”

Its forecast for global sunflowerseed production for the 2023/24 marketing year was raised by 1.1M tonnes to 55.8M tonnes.

“Higher production in Ukraine and Russia more than offset lower sunflowerseed crops in the European Union (EU), Kazakhstan, Turkey and China,” the ERS was quoted as saying.